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What can happen if you buy a new apartment off the plans and the area is less than what you paid for

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Many apartments in Argentina are sold off the plans (en pozo) and usually this goes smoothly. However occasion there is a discrepancy between the m2 paid for and the number delivered.

Sometimes there are more and sometimes less.

However this Buenos Aires buyer did not take this lying down. He sued and won for the missing metres.

Paola U. bought a department in the neighborhood of Belgrano in mid-2011. When it was delivered, the property had fewer square meters of what the construction company had promised. The woman sued the company and the courts agreed with her.

“The problem is that a functional apartment of a certain size was promised, and it was concluded by delivering a different, smaller one, which is a breach of contract,” the Civil Court resolved.

Now the construction company must return to the owner the money she paid for the square meters that the department does not have. They are 105 thousand pesos Argentine  plus another ten thousand for moral damage plus interest since the claim began, four years ago. The total compensation is about 200 thousand pesos.

The lack of controls is why the builders can do these things, the owner has to avoid signing abusive clauses, be very aware of the co-ownership regulations, and it’s very important to know who the builder is by reputation.

Paola U. bought in July 2011 the company “New 1817 SA” a two-room apartment in the street Jorge Newbery to 1800. It was a construction in progress so-called “en pozo” – and the woman acquired it already in the final stage.

She paid $ 105,665 for a property of 53 square meters, on which the price was calculated. The purchase contract said that the meters were temporary and could be modified by technical adjustments of the work or by observations of the municipal authorities. The same contract established that the parties could not make claims for a possible difference in dimensions, except that they are greater than 7 percent of the agreed meters.  And that was what happened .

The woman took possession of the building in December 2011 and a year later, in November 2012, she received the Co-Ownership Regulation. There she was warned that the property had 45.05 square meters, 7.95 meters less, which made a 12.84 percent less surface. The same number of meters on the title of the public deed.

The owner sent a letter in July 2013 to the construction company with the claim. There was some  mediation that was unsuccessful and the woman initiated a cause for damages in the courts: she demanded that they return the money she paid for the square meters that the department does not have.

The defense of the corporation that built the building – created in 2008 only for this building, something common in the field – was that the owner delayed in presenting the claim and that the claim was prescribed.

In the first instance the claim was rejected because it was a sale in which the price was fixed for the property itself and not for its measurements. In addition, the owner did not make any reservation or observation about the department’s meters when she took possession of it.

But the case came to Room H of the Civil Chamber that gave the reason to the buyer for the ruling late last November. Judges Claudio Kiper and Liliana Abreut de Begher pointed out that the construction company breached the original contract.

“The problem is that a functional unit of a certain surface was promised, and it was concluded by delivering a different, smaller one, which is a breach of contract, that is, a breach of the quality of the thing sold ,” Kiper said. voting to which his legal colleagues agreed.

The judges explained that in the contract the parties agreed that the difference of the meters could not be more than 7 percent of what was promised. “When the plaintiff evaluated the purchase price they would have considered the size of the apartment they were buying.

They also ruled out the argument that the woman had not objected to the meters when she took over the property. “On the one hand, it is not easy to calculate the surface difference when taking possession, on the other hand, it is known that in these cases the seller gives possession with prerecorded minutes, and does not allow changes or reservations. in that receiving possession without making a reservation does not prevent claims for hidden defects later on, “they said.

The difference in the square meters was confirmed by the opinion of an expert surveyor who acted in the case.

The judges also rejected the prescription argument. They said that in the case, article 4.023 of the Civil Code must be applied, which establishes that “all personal actions due to due debt is prescribed for ten years”.

Thus, the Chamber ordered that the construction company must pay the owner for the square meters that the department lacks. The woman asked to be set at three thousand dollars USD per square meter for the value of the area. But the court took notice of what was paid by the woman. It was about 1993.6 dollars USD per square meter, which makes a total of 13,238 dollars that are taken to pesos are 105,904 considering that the dollar was eight pesos when the purchase was made.

In addition, the judges arranged for the woman to be compensated with 10 thousand pesos for moral damages. “I do not doubt the frustrating  position the buyer found herself in when she realised that she had acquired a department with an area significantly inferior to the promised one” , reasoned the judges.

The 115.904 pesos of the total compensation should be applied interest since the owner started the claim in July 2013. The total amount of compensation is close to 200 thousand pesos.

The third judge of Room H of the Civil Chamber, José Fajre, voted in dissent. The judge claimed that the claim is prescribed. He pointed out that the woman took possession of the department in December 2011 and that she noticed the differences in the meters in November 2012 when they handed over the property regulations. “All this makes me presume that the measurements were not that relevant, because, clearly, it has not prevented her from using the property of the purpose for which she acquired it, since if it had been so, she should have claimed an action of nullity by mistake” , noted in his vote. For this magistrate it was not a case of damages but defects redhibitorios-the hidden defects of something that is unfit for their purpose, which has a period of three months to cancel a purchase and sale contract or to initiate an action to lower the price, according to the Civil Code. “In the case the period has elapsed comfortably , ” he concluded.

The moral is if you are buying off the plans have the area measured within three months so you can make a claim if it is less than 10% of what you purchased.

( plan shown is an example not the case in question )

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and disposal.

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Geoffrey McRae

About Geoffrey McRae

Geoffrey McRae is the founder of GTSA - Marketing. He is a New Zealander with a strong Agro-business and Real Estate background spanning over 30 years both in his own country and South America. I hope you enjoy reading our news site. Please share it on your social media below.

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